Ferrexpo was pitched to the Stockopedia Investment Club (SIC), for the second time, on 2nd February 2021.

One of the most consistent high-ranking shares in the market, Ferrexpo has always been on the SIC’s radar of potential Stock Pitches. In August last year, after a recovery in the iron ore market, Ferrexpo was finally pitched to the SIC.

At the time, some looming corporate governance issues led the SIC to opt against purchasing shares. The shares, however, soon went on to almost double over the subsequent 6 month period!

After a recent retracement in the share price, despite the continued strong fundamental backdrop for iron ore prices, buoyed by the ever-growing steel demand from China, Ferrexpo was once again pitched to the club.

As a speculative, mid-cap, super stock, Ferrexpo possesses some intriguing attributes, especially given its unique positioning as a premium iron ore pellet producer in Europe. With iron ore prices close to their highest point since 2011, does Ferrexpo warrant a position in the SIC portfolio this time around?

bcUSRpktWNpQQTWkVMlKClnKsCB4033OuyYde3M0tp7RabrQhyn1iJ6BStXZ3gpfg66ZOjyGxn_qXRbXoiSIkcKJ6OjMkUZaXbJXW1Ht5_RXZuc8CZ4WBCDILUUn-UDyFyxxhWtM


Summary

Bull Points - Iron ore prices close to their highest point in almost a decade, transformational free cash flow generation for the foreseeable future, production expansion on-going with higher grade 67% Fe pellets, generous capital returns structure, improving balance sheet which might be used to propel future growth opportunities.

Bear Points - History of directorate issues, reliance on iron ore prices, single asset/region risk.


Profile

Ferrexpo (LON:FXPO) is a FTSE 250 listed company, operating in the Metals & Mining industry. The company is one of the largest exporters of premium iron ore pellets in the world, which it produces from its mining activities in Ukraine.

At the current share price of 312p, Ferrexpo’s market capitalisation is worth just over £1.83 billion. After a fairly volatile 2020, Ferrexpo shares ended the year in a position of strength, largely mirroring the performance of iron ore prices.

The Speculative, Mid Cap is also currently classified as a Super Stock, due to its all-round impressive value, quality and momentum characteristics. Evidence of this can be seen by the 99 StockRank rating of the company. Both the Value & Momentum Ranks remain above 80, whilst the Quality Rank has reached 92.

BIjl8sQoOZPcPjLDy0Oac-oZnlGa8--cLETZFx4SpGRH7ym1fs8H8_6A1KzqNvbsTKxmDvb0EviKYPjBBhSXcjMZb-pGfvPWmsRQ4I5rUC25ieESJygzxFMXL4x8MGZSHzHGRz0Y

A…

Unlock the rest of this article with a 14 day trial

or Unlock with your email

Already have an account?
Login here